City audit reflectsimproved finances

Published 2:39 pm, Friday, April 22, 2016

It hasn’t been easy, but it appears that the City of Marlette is beginning to turn the corner on its budget following the presentation of the annual audit by City Auditor Lehn King on September 20th.

While the city’s water and sewer accounts continue to be a source of concern, overall the city budget looks healthier than it has in a number of years thanks largely to a series of cuts imposed by city officials over the past year.

“Things look better for the City of Marlette. The fund balances and cash balances have increased and noticeably the General Fund. You increased the General Fund by $208,000. We haven’t had $208,000 in the General Fund in a long ways. We seem to have this under control a little bit.

“This kind of gives the flavor of what’s happened in the city which is a different complexion to what’s been going on for the last four or five years. This isn’t a one year fix. I think it is something we can build on,” King said.

For years, King has cautioned the city that it should have a 25% contingency fund. This year, Marlette will show approximately a 20% contingency fund as the final fund balance for the General Fund stands at $233,304.01 out of a total city budget which shows $1,959,283.75 in revenues.

The cities revenues are comprised of property taxes, intergovernmental revenues, licenses permits and fines, charges for services and capital charges, cemetery parks and recreation, donations and contributions and interest from accounts.

“We are almost at the 25% that you have talked about in cash reserves. In past years you talked about the police department, pool and cemetery and cautioned that we might have to cut one of the three, but we have all three,” trustee Steve Quade said. Quade asked King to explain the turnaround.

“I don’t think there is any one thing. The police department has made some cuts. The Department of Public Works wages are less. I don’t know but what it’s a little bit of everything.

“I didn’t know you’d be able to turn it around financially and still keep the pool, but it looks like you did. It seems like every department cut back a little bit.

“After I got done with the audit I couldn’t hardly believe what I was seeing,” King said.

Marlette Mayor Donald Redman noted that, indeed, the city has trimmed personnel while maintaining services. Redman alluded to the fact that in 2008 Marlette had 11 full time employees and seven part-time personnel; in 2009 that figure had dropped to 10 full time employees and six part-time workers and by 2010 the city has seven full time employees and four part-time workers.

“What’s nice about it is that there hasn’t been any services lost,” Redman said.

Marlette Manager Lou Laponsie echoed those figures noting that there has been a 36% reduction in full time staff members, a 43% reduction in part-time staff members and the city recently saved $300,000 in an agreement with the Michigan Economic Development Corporation on the payback program for the city’s Industrial Park. In addition, Marlette saved $80,000 by trimming the Brownfield project from five years to three years and saved $60,000 by changing employee health coverage.

“These are cuts that we have made in the last year and one half and some of those savings are going to be over a period of time,” Laponsie said.

“The good news is that we learned to do more with less. I give a lot of the credit to Lou and the city employees. We have been very fortunate and we have turned a heck of a corner. I want to thank all of you for doing the job that you have done,” Redman said.

“Many of the things we are doing are long term savings and not just a one year thing. I still think we can get over that 25% fund equity which was recommended. On top of that we are getting some of our streets paved.

“We are also not buying a $200,000 piece of equipment (new sweeper), but are spending something much smaller than that,” Finance Committee Chairman Dennis Cargill offered.

King’s audit, which traces accounts through June 30, 2010 which is the end of the city’s fiscal year, shows the General Fund with $1,032,407,59 in revenues, Major Streets with $121,918.93, Local Streets with $42,521.36, Municipal Street Funds with $72,873,51, Downtown Development Authority with $168,904,05, Local Development Finance Authority with $56,072,23, Debt Service with $429,494,59, and other accounts with $35,091.49.

Marlette shows $1,432, 353,95 in expenses for the fiscal year and a total of $1,117,934.18 in fund balances for the year.

“We have made cuts in the police department, DPW and administration. We will also be closing out the LDFA in the spring of 2011 and will get roughly $40,000 of that as the county will get a share of that as well.

“It will be another amendment to the budget,” Laponsie said.

“It’s the first time since I’ve been auditing that we had an (positive) amendment to the budget,” King offered in reference to last month’s amended budget.

“The pool actually generated better revenues. It was not the huge chunk that it appears to be. It is all part of it, we are getting there,” Redman said.

“There were extensive repairs to the pool two years ago. We should be able to operate the park and the pool in a reasonable fashion that everybody will be happy with,” trustee Chuck Zampich added.

While the overall budget drew rave reviews, it was noted that the sewer and water budgets continue to be a source of concern. Marlette’s Water Fund shows $53,156 in revenues, up from $21,227 in 2009, but the Sewer Fund has revenues of $60,977, down from $75,579 in 2009.

“You dump a debt service like that (wastewater treatment plant) on a small municipality like this, there is always going to be a problem. It is tough, but we basically broke even and didn’t go backwards. You are basically kind of floating along, but it is going to be awhile,” King cautioned.

“The water fund is just making it and there is a little problem with the sewer. There is a fund balance in each of those accounts, but the fund balance has dropped from the last year,” Laponsie said.

He cautioned that the city will be faced with another major cost next spring as the Department of Natural Resources is enforcing a mandate for Marlette to repaint it’s water tower.

“The maintenance of the water tower will be a big issue on the budget next spring. They wanted us to do it this year, but we asked to postpone it until next year because we didn’t have the money,” Laponsie said.

City officials noted that city employees continue to look for ways to make cuts to help the city turn the financial corner.

“I have to agree that the staff and everybody working together has really made a difference this past year. Everybody has made a commitment to try to improve for next year,” Laponsie said.

“I’d like to compliment the employees for looking at cuts versus benefits,” Quade added.

In other news, the city did purchase a refurbished 1996 Pelican street sweeper from Bell Equipment, Lake Orion at a total cost of $30,000. The original cost was $45,000, but the firm took Marlette’s Geo-Vac sweeper in on trade offering $15,000 off the bill. Marlette will also receive a 90 day warranty.

“We feel we can get six to eight years on the machine and the estimate to repair our old sweeper was $12,000,” Laponsie said.

“It seemed like that (purchasing a new street sweeper) was not the thing to do in these tough times. I think this is the way to go,” Zampich said.

Council also accepted the low bid of Partners in Grime, North Branch to clean the city hall at $13.00 per hour and voted to transfer $300,000 from the General Fund into a CD with a 0.65% interest.